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#2266432 - 02/16/22 12:11 PM Indiana Open End Non-Finance Charges on HELOCs
dshuff Offline
Junior Member
dshuff
Joined: Jun 2007
Posts: 33
Ohio
Our customers are issued checks to draw off of their Open End HELOCs. Is it permissible to charge the customer a stop-payment fee if they wish to put a stop payment on one of those checks?

If so, how could it be disclosed on the HELOC documents at closing?

Thank you,

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#2266469 - 02/16/22 05:18 PM Re: Indiana Open End Non-Finance Charges on HELOCs dshuff
Dan Persfull Offline
10K Club
Dan Persfull
Joined: Aug 2002
Posts: 47,018
Bloomington, IN
That is not an allowable fee for HELOCs under IN Statutes. IC 24-4.5-3-202
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

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#2266501 - 02/16/22 10:08 PM Re: Indiana Open End Non-Finance Charges on HELOCs Dan Persfull
dshuff Offline
Junior Member
dshuff
Joined: Jun 2007
Posts: 33
Ohio
That is what I was afraid of. Thank you.

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#2266582 - 02/18/22 02:42 PM Re: Indiana Open End Non-Finance Charges on HELOCs Dan Persfull
dshuff Offline
Junior Member
dshuff
Joined: Jun 2007
Posts: 33
Ohio
Since this is an incidental fee and not specifically a loan related fee, would it be permissible to provide the customer with a separate notice disclosing the fee should the customer wish to place a stop payment on a HELOC check as a work around, particularly since stop payment fees are allowable in Indiana on the checking account side?

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#2266614 - 02/18/22 06:26 PM Re: Indiana Open End Non-Finance Charges on HELOCs dshuff
Dan Persfull Offline
10K Club
Dan Persfull
Joined: Aug 2002
Posts: 47,018
Bloomington, IN
Short answer - no. It is still a fee associated with the HELOC and it is not an allowable fee under the Statute. 202 also does not allow an overdraft fee on the account. 202 does however allow a "return payment" fee as long as it has been contracted for. See 202(f).
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

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#2266623 - 02/18/22 08:53 PM Re: Indiana Open End Non-Finance Charges on HELOCs dshuff
Dan Persfull Offline
10K Club
Dan Persfull
Joined: Aug 2002
Posts: 47,018
Bloomington, IN
Took me a bit but I finally found it. The following is from the DFI in response to my same inquiry in 2002. Mark Tarpey retired a couple of years ago.

-----Original Message-----
From: Mark Tarpey [mailto:mtarpey@DFI.state.in.us]
Sent: Monday, December 2, 2002 9:27 AM
To: Dan Persfull <>
Subject:

Additional charges on a home equity line would be limited to those authorized by IC 24-4.5-3-202. There is no provision for a stop payment fee under a loan account.

IC 24-4.5-3-203.5 does provide for a late charge of what is $16 as of 7/1/02 on any payment not made in full within 10 days of the due date as long as your contract provides for it. This is for all accounts open end, closed end, etc. First mortgage loans are not under this provision and can be in whatever amount as long as it is properly contracted for and disclosed.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

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#2266627 - 02/18/22 09:26 PM Re: Indiana Open End Non-Finance Charges on HELOCs Dan Persfull
dshuff Offline
Junior Member
dshuff
Joined: Jun 2007
Posts: 33
Ohio
Thank you for all of the information you have provided. I appreciate it Dan.

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